Search Results
Working Paper
Do Minimum Wages Really Increase Youth Drinking and Drunk Driving?
Adams, Blackburn, and Cotti (ABC) found that increases in minimum wages were positively related to drunk driving?related traffic fatalities for those ages 16 to 20. The hypothesized mechanism for this relationship?increased alcohol consumption caused by minimum wage?induced income gains?remains empirically unexplored. Using data from two national behavioral surveys and an identification strategy identical to ABC, we find little evidence that an increase in the minimum wage leads to increases in alcohol consumption or drunk driving among teenagers. These results suggest a much smaller set of ...
Working Paper
The Hidden Effects of Algorithmic Recommendations
Algorithms are intended to improve human decisions with data-driven predictions. However, algorithms provide more than just predictions to decision-makers—they often provide explicit recommendations. In this paper, I demonstrate these algorithmic recommendations have significant independent effects on human decisions. I leverage a natural experiment in which algorithmic recommendations were given to bail judges in some cases but not others. Lenient recommendations increased lenient bail decisions by 40% for marginal cases. The results are consistent with algorithmic recommendations making ...
Working Paper
Financial regulations and price inconsistencies across bitcoin markets
We document systematic differences in bitcoin prices across 11 different markets representing 26% of global bitcoin trade volume. These differences must ? due to the identical nature of all bitcoin ? result from characteristics of markets themselves. We examine differences across the markets and find that those which do not require customer identification for establishing an account are more likely to deviate from representative market prices than those which do. This implies that standard financial regulations, specifically know-your-customer regulations, can have a non-negligible impact on ...
Speech
The rewards of an ethical culture
Remarks at the Bank of England, London.
Working Paper
A Model of Charles Ponzi
We develop a model of Ponzi schemes with asymmetric information to study Ponzi frauds. A long-lived agent offers to save on behalf of short-lived agents at a higher rate than they can earn themselves. The long-lived agent may genuinely have a superior savings technology, but may be an imposter trying to steal from short-lived agents. The model identifies when a Ponzi fraud can occur and what interventions can prevent it. A key feature of Ponzi frauds is that the long-lived agent builds trust over time and improves their reputation by keeping the scheme going.
Report
Crime, house prices, and inequality: the effect of UPPs in Rio
We use a recent policy experiment in Rio de Janeiro, the installation of permanent police stations in low-income communities (or favelas), to quantify the relationship between a reduction in crime and the change in the prices of nearby residential real estate. Using a novel data set of detailed property prices from an online classifieds website, we find that the new police stations (called UPPs) had a substantial effect on the trajectory of property values and certain crime statistics since the beginning of the program in late 2008. We also find that the extent of inequality among residential ...
Working Paper
The effect of changing employers’ access to criminal histories on ex-offenders’ labor market outcomes: evidence from the 2010–2012 Massachusetts CORI Reform
Many regard the 2010?2012 Massachusetts Criminal Offender Record Information (CORI)Reform as a national model to improve ex-offenders? labor market outcomes. This reform prohibits most employers from inquiring about an individual?s criminal history on the initial job application (the ?ban the box? reform), and reduces employers? access to an applicant?s criminal record (the record-access reform). Using the CORI Reform as a natural experiment and a unique large confidential dataset linking individuals? CORI records with their unemployment insurance quarterly wage records, we examine the impact ...
Working Paper
Financial Well-being and Inclusion of Justice Involved Populations: Evidence from the SHED
This study examines financial challenges faced by justice-involved individuals using 2023-2024 Survey of Household Economics and Decisionmaking data. Individuals with justice system contact experience substantially worse financial outcomes than those without criminal records, with disparities widening by severity of involvement. Compared to individuals with no prior records, those arrested but not convicted are 4 percentage points less likely to report doing at least okay financially, while formerly convicted as well as incarcerated adults are 15 percentage points less likely. Formerly ...
Working Paper
Information Production, Misconduct Effort, and the Duration of Financial Misrepresentation
We examine the link between information produced by auditors and analysts and fraud duration. Using a hazard model, we analyze misstatement periods related to SEC accounting and auditing enforcement releases (AAERs) between 1982 and 2012. Results suggest that misconduct is more likely to end just after firms announce an auditor switch or issue audited financial statements, particularly when the audit report contains explanatory language. Analyst following increases the fraud termination hazard. However, increases (decreases) in analyst coverage have a negative (positive) marginal impact on ...
Working Paper
Can Reputation Discipline the Gig Economy? Experimental Evidence from an Online Labor Market
Just as employers face uncertainty when hiring workers, workers also face uncertainty when accepting employment, and bad employers may opportunistically depart from expectations, norms, and laws. However, prior research in economics and information sciences has focused sharply on the employer?s problem of identifying good workers rather than vice versa. This issue is especially pronounced in markets for gig work, including online labor markets, where platforms are developing strategies to help workers identify good employers. We build a theoretical model for the value of such reputation ...